The Korea Times
WeMakePrice expects to become profitable
With a growing consumer audience who are online and using social media, leading social commerce operator, WeMakePrice, is expecting continued growth both in profit and revenue.
What makes it special is that the company is creating a collaborative and participative environment between both the consumer and online stores, allowing for a more social and customized shopping experience. Using the social element is important to build trust with potential and existing customers and make sales as well, company officials said.
“Social media was designed primarily for interaction, expression and most importantly, to create connections. WeMakePrice is not just seeking to grab attention on social media, but to join the conversation with customers,” company spokesman Lee Hanul said.
On Tuesday, WeMakePrice said it generated 473.1 billion won in sales last year, up 28.2 percent from the previous year. This annual growth rate was far better than those of its chief domestic rivals.
Operating profit margin loss was 41.7 billion won, dropping by 34.4 percent, while net loss was also cut to 47.6 billion won or 42.6 percent.
Cash and cash-equivalent assets last year were up to 204 billion won, a whopping 41.6 percent increase year-on-year.
Lee said the improved financial soundness was thanks to its decision to shut down unprofitable units while focusing on selling goods sourced directly without any middleman. For example, it expanded its mainstay business, while adding new business models, one of which is to deliver products a day after a customer purchase.
“WeMakePrice expects a turnaround of profit on a monthly basis within this year. The company’s conversation-driven business strategies have been successful,” Lee said, adding his company would pursue external growth throughout this year.
Social commerce business models are at a “cross-point” as many of them have been struggling due to heated competition between players, with some of them selling products below the market price.
Groupon, a Chicago-headquartered social commerce titan, for example, laid off about 1,100 employees recently due to its continued sluggish corporate performance. WeMakePrice is one of three companies in the domestic social commerce market, along with Coupang and T-Mon.
SoftBank awarded Coupang a 1 trillion won investment in 2015. But it has been in the red since then. T-Mon has been reporting over 100 billion won annual operating losses over the last three years, with the company seeing its revenue and transaction volume drop.